Using Farm Program Decision Tools

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R. Brent Young, Ph.D.
Agriculture and Business Management Specialist
Colorado State University Extension
Jeff Tranel
Norm Dalsted
Jesse Russell
Dennis Kaan


Public Tools: PLC, ARC-CO, ARC-IC, Crop Insurance
Private Sector Tools (things producers can do on their
own):
◦
◦
◦
◦

Hedging commodities
Using options contacts (commodities & inputs)
Forward contracting commodities
Advance purchase of inputs
Collective Solutions (things producers do with help):
◦ Forward pricing: cooperative or other buyer offers a fixed price
contract for a future period and uses futures markets to protect
their position.
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NCPE
Illinois
Program
NAAFP
Texas A&M
Program
Agriculture &
Business
Management
◦ http://farmbilltoolbox.farmdoc.illinois.edu/arc-plcdecision-steps.html
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
National Association of Agriculture and Policy (NAAFP)
has been working on the decision aid for more about 2
years. NAAFP is led by
◦ AFPC at Texas A&M
◦ FAPRI at University of Missouri-Columbia

Applied for and received funding from USDA-FSA to
develop a nation-wide decision aid
Available at: https://USDA.afpc.tamu.edu

And at: www.afpc.tamu.edu

Agriculture &
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Management

Register as a producer or a multi-client user
◦
◦

Enter data for all of the farm’s FSA Numbers
◦
◦

Email address and password protect your data
Email address allows us to contact user when FSA changes rules and
when new price projections are available
All Crops and their Practices by Type
Types not critical to FSA but important to RMA for SCO, STAX, and
Insurance Decisions
Types of Analyses
◦
◦
◦
◦
◦
Yield update
Base reallocation
ARC-IC, ARC-CO, PLC, SCO
STAX and SCO for cotton
Insurance options (Y, RP, RP-HPE, CAT, None)
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
Producers’ data are stored in the decision aid
◦ Data accessed by a user name and password
◦ Secured behind Texas A&M firewall, along with student grades and
records
Producers can enter their data, run for alternative prices as updated by
FAPRI monthly
◦ Yield Update Decision
◦ Next analyze the interaction between Base Reallocation and PLC and
ARC-CO Election
 Before final election, farmers can re-run the analysis for March
price outlook
◦ Run Insurance Analysis annually for next 5 years
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
Information available from two primary sources
◦ FSA Reported Commodity Crop History Summary
(letter from FSA to producers, August 2014)
 FSA farm number
 Base Acres and CCP Yield for covered crops
◦ Crop Insurance Actual Production Report
 Historical yields and planted acres
 Ten years of yields preferred but 2008-2012 are
essential
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All of the decisions required in the farm bill add
to the producer’s ability to tailor the bill to fit
their operations – not just add to complication
There will be plenty of time to gather needed
info, analyze options, and make sign-up
decisions – no reason to panic
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Augu
st
2014
Oct
Sept
Fix Planted
Acres with
FSA
Nov
Dec
Jan
Feb
17th
May
June
2015
31st
27th
Reallocate Bases & Update Yields
Margin28th
Protection
Program for
2014 and 2015
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Management
April
Election Between ARC & PLC
29th
2nd
Dairy
March
Mid
Annual Sign-up


Public Tools: PLC, ARC-CO, ARC-IC, Crop Insurance
Private Sector Tools (things producers can do on their
own):
◦
◦
◦
◦

Hedging commodities
Using options contacts (commodities & inputs)
Forward contracting commodities
Advance purchase of inputs
Collective Solutions (things producers do with help):
◦ Forward pricing: cooperative or other buyer offers a fixed price
contract for a future period and uses futures markets to protect
their position.
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Richardson, J. W. (2014, November). NAAFP Farm Bill
decision aid, Farm Bill decision aid training. Meeting
conducted by the National Association for
Agriculture and Food Policy, Salt Lake City. UT.
This presentation can be found at the CSU ABM
Website
http://www.coopext.colostate.edu/abm/farmbilltrai
nings.shtml
Agriculture &
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Agriculture &
Business
Management
R. Brent Young, Ph.D.
Agriculture & Business Management Specialist
Ph. 970.522.7207
[email protected]
Agriculture &
Business
Management
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